Without reimbursement stability, physicians may drop Medicare beneficiaries

Key Points

In late March, a new survey of physicians by the American College of Surgeons showed that 37 percent of respondents would change their Medicare status to nonparticipating, while only 31 percent said they would remain a Medicare-participating physician.

Twenty-nine percent of responding physicians said they would opt out of Medicare for two years and privately contract with Medicare patients, while 3 percent said they would remain a Medicare nonparticipating physician.

Unwilling to include reform of the Medicare fee payment system in the new healthcare reform law because it would send its cost soaring over the magical 10-year, $1 trillion mark, Congress now must figure out a solution, as uncertainty reigns for physicians and their patients.

Wise to the ways of Congress after so many Medicare fee-cut reprieves over the years, CMS announced in late March that it would delay implementing the scheduled 21.2 percent fee cut, slated to take effect April 1, until Congress returned from its Easter recess on April 12.

The agency, which administers the Medicare program, ordered that claims submitted on or after April 1 be held for an additional 10 days before being paid. That's in addition to the 14 days CMS usually takes to pay claims - putting off until about April 25 the actual implementation date of the reductions.

At press time, it appeared likely that Congress would attempt to provide a retroactive temporary fix after returning to work from the Easter recess on April 12.

Overrules abound

Lawmakers have overruled similar reductions every year except one since the Medicare sustainable growth rate (SGR) formula was implemented as part of the Balanced Budget Act in 1997. Some years, the congressional action came even after the planned reductions took effect, requiring CMS to reimburse physicians after the fact. Meanwhile, every year the scheduled cuts required by that law have grown larger, as one reduction is piled on top of the others.

In November 2009, the House passed legislation that would replace the schedule of cuts with annual increases costing $210 billion over the next decade. This year, the increase would be about 1.2 percent, reflecting the rise in the Medicare Economic Index, according to the Congressional Budget Office.

But the Senate never took up that legislation, and instead passed a bill delaying a decision until Oct. 1, which at press time still needed House approval to become law.

Congress, exhausted from its long debate over healthcare reform, left town without even passing another 30-day extension to provide time to consider the seven-month extension.

During the debate in the Senate over the reconciliation bill that included several amendments to the overall healthcare law, Sen. Judd Gregg, (R- N.H.), ranking member of the Senate Budget Committee, offered an amendment to extend the current reimbursement formula for three years, saying it would be paid for by savings that Democrats claimed would occur under the new healthcare measure.

"We all know that these scheduled cuts will never take place," Sen. Judd said. "If they did, doctors wouldn't be able to afford to see Medicare patients. Medicare patients deserve access to quality care, and doctors deserve to be paid fairly for their services."

As Senate Democrats sought to minimize any amendments to the reconciliation measure that could jeopardize its passage in the House, Judd's amendment was not approved.

Bottom line

In essence, the bottom line is that physicians are thoroughly frustrated with Congress for not resolving the SGR issue after all this time.

In an action alert to members on March 30, the AAD stated that access to care for millions of patients is threatened as a result of the "flawed" Medicare payment policy.

"Physicians need a stable payment system, without the annual threat of dramatic cuts, in order to invest in growing their staff and modernizing their practices so that they can continue to deliver high-quality care to Medicare patients," the AAD said in its member alert. "A stable payment system preserves jobs for all who work in medical practices beyond physicians - nurses, medical assistants, office and clerical staff. Without a stable payment system, medical practices will be unable to continue to employ the necessary staff to help take care of patients."

Bob Gatty, former congressional aide, covers Washington for businesses specializing in healthcare and related issues. Contact him at bob@gattyedits.com
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